Lieberman Caught in Political Bind

By Dan Morgan, Washington Post,Saturday 26 August 2000

Big pharmaceutical companies and health insurers have been among the
most generous donors to Connecticut Sen. Joseph I. Lieberman and the
centrist Democratic political organization he co-founded four years
ago. But lately the Democratic ticket he joined in Los Angeles has
been biting the hand that funds him.

Since accepting the Democratic nomination in Los Angeles, Vice
President Gore has unleashed a blistering populist attack on health
maintenance organizations and drugmakers, savaging the former for
denying care to patients and the latter for keeping prescription drug
costs beyond the reach of many Americans.

For Lieberman, Gore's running mate, the onslaught has created a
somewhat awkward situation. In his nearly 12 years in the Senate,
Lieberman has been one of the strongest advocates for the insurance
and pharmaceutical industries, which employ thousands of people in his
home state.

When Lieberman co-founded a campaign group called the New Democrat
Network in 1996 to raise money for centrist Democratic candidates,
drugmakers and health insurers stepped in as major supporters.

Aetna Inc., based in Hartford, Conn., and Citigroup Inc., which merged
in 1998 with Travelers insurance, have been the two largest donors
this year, contributing $50,000 each in unregulated soft money,
according to new records released to The Washington Post by the New
Democrat Network. American International Group Inc. and Cigna Corp.,
whose health insurance business is headquartered in Connecticut, each
put up $25,000.

The New Democrat Network has also received financial backing from such
pharmaceutical giants as Bristol-Myers Squibb Co., Schering-Plough
Corp. and Glaxo Wellcome Inc., along with the industry's main trade
group, the Pharmaceutical Research and Manufacturers Association.

A spokesman said yesterday that Lieberman was "totally in
sync" with Gore's positions on prescription drugs and HMO reform,
major issues facing Congress in which the pharmaceutical and insurance
industries have an enormous stake.

Lieberman voted this year in favor of a prescription drug benefit for
Medicare recipients that is at odds with the industry, and for
legislation that, for the first time, would allow HMO patients to sue
health plans in state courts and collect punitive damages.

"He's proud to have the support of industries that provide jobs
for thousands of families, but he isn't afraid to oppose them when
they don't act in the best interests of average families," said
his Senate spokesman, Dan Gerstein.

The disconnect between the tough rhetoric emanating from the
Democratic ticket and the flow of corporate money was on display at a
glittering "welcome event" during the Democratic National
Convention at the Renaissance Beverly Hills Hotel earlier this
month. Hosts were the New Democrat Network and the Democratic
Leadership Council, a centrist think tank that Lieberman chairs.

Sponsors included Cigna, AFLAC Inc. and the Mutual of Omaha Cos.,
along with the Health Insurance Association of America (HIAA), whose
members include several big HMOs. In attendance were Sen. Charles
S. Robb (D-Va.), who has received $46,500 from the New Democrat
Network for use in his tight Senate reelection race this year.

A few days after the Beverly Hills event, Gore, in his acceptance
speech, vowed to fight "powerful interests," including
pharmaceutical companies and HMOs, along with toxic polluters, oil
companies and tobacco firms.

Several industry officials acknowledged being taken aback by the
vehemence of the attacks.

"It's extremely shortsighted that politicians have chosen in this
election year to use a number of industries, particularly insurance
and HMOs, as whipping boys," said Charles N. "Chip" Kahn
III, HIAA's president.

Karen Ignani, president of the American Association of Health Plans,
the main HMO trade group in Washington, called the attacks an
"exercise in demonization that reduces everything to the lowest
common denominator." The association is poised for a major TV
advertising campaign that will play on the theme of politicians using
HMOs as a pinata to beat on.

But the Gore campaign indicated yesterday it has no plans to back off.

"Al Gore and Joe Lieberman support a real, enforceable patients'
bill of rights and a prescription drug benefit for all 40 million
Americans on Medicare, which has been the subject of millions of
dollars in ads by the drug industry," said campaign spokesman
Douglas Hattaway.

Despite that, industry spokesmen this week steered away from
criticizing Lieberman or Gore personally. Lieberman, said a Glaxo
Wellcome spokeswoman, "shares some of our philosophy and
priorities." Others described him as receptive to business
concerns.

"It's the political season and it's accompanied by a lot of
posturing and rhetoric," said Judith H. Bello, executive vice
president of the Pharmaceutical Research and Manufacturers
Association.

"We're disappointed at being painted as villains. We're trying to
help people live longer, better lives. But we understand political
expediency," said the Glaxo Wellcome spokeswoman.

Behind that relatively mild criticism is a belief on the part of some
industry officials that Gore and Lieberman, if elected, will be
willing to work with them in shaping major new legislation on HMO
reform and a prescription drug benefit.

Both have been "good friends on the real issues," Bello said.

Insurance and pharmaceuticals provide Lieberman with his fifth- and
seventh-largest sources of support, according to the Center for
Responsive Politics. Lieberman is one of the few Democrats who
supports limits on the liability of companies that are sued for
injuries caused by products or services. He also supports one of the
key goals of HMOs: limits on punitive damages and independent, outside
review of judgments against health plans.

Lieberman also has lobbied hard for pharmaceutical companies on issues
ranging from research and development tax credits to streamlined FDA
reviews of applications for marketing new drugs.